In the city of Atlanta, there are many oil change facilities and many dentists. Out of these many oil change facilities, and these many dentists, there is the Express Oil Change & Service Center, and the dental practice of Dr. Elizabeth Caughey. While these two businesses are very different in the services they provide, they are both two entities with high levels of market competition, and face similar challenges in establishing a brand and growing their business.
This is their story.
Brand One: Express Oil Change & Service Center
Express Oil Change & Service Center recently ran a Groupon deal that advertised $101.97 worth of services (oil change, tire rotation, and brake inspection) for $30. For those in desperate need of an oil change, this was a great deal. While oil change facilities are plentiful, it’s difficult to differentiate what sets each business apart until it is actually visited.
The automotive repair industry doesn’t exactly have a sterling reputation. So, the user experience is a key differentiating factor (along with price, of course) among these facilities. Establish a level of trust with the customer, and repeat business is nearly in the bag. Because of the level of competition created by the numerous choices for oil change businesses, the first impression is everything.
Unfortunately, Express Oil fell short of creating a memorable first impression. Additionally, they didn’t live up to their promise of service. However, during checkout, customers are provided a “new customer packet” with several discounts for future services. They bring customers in with a discount. They encourage customers to come back with discounts. Discounts are their primary marketing strategy.
Brand Two: Dr. Elizabeth Caughey, DDS
Dr. Elizabeth Caughey’s dental practice has a five-star rating on Kudzu.com. Reviews say such things as, “The detail and time she spent with me…was surprising,” and “The perfect dentist!” New patients calling for an appointment speak with the office manager, who talks to them about the practice and explains the mission of the practice: to provide comprehensive, quality dental care. This dedication to quality care involves more thorough exams, and greater involvement from Dr. Caughey. As a result, it is somewhat more expensive than other dentists.
However, as the reviews illustrate, Caughey’s practice fulfills this expectation of superior service. The exams are comprehensive. The attention to detail and quality is clear. Delivering a premium service above that of their competitors is their marketing strategy.
Two businesses, each with a high level of competition, both facing similar challenges in establishing a brand. One uses discounts. The other uses superior service.
While discounting, especially through deal sites like Groupon.com, can be particularly effective at generating new business, the fatal marketing mistake is focusing primarily on future discounts at the expense of brand development. Had Express Oil put as much effort into the brand experience as they do their discount programs, they would have a better shot at generating brand loyalty — and loyalty at full price. Even if consumers were willing to sacrifice on quality in return for a discount, consumer loyalty is there only as long as the discounts. Once the discounts go away, so will the consumers. This means they are forever trapped in “discount mode” — not a good place to be.
On the other hand, the dental office put their energy into delivering a superior product, even at a premium price. They built their brand on quality — not discounts. Their brand is far stronger than that of the oil change facility because the dental office will generate consumer loyalty so long as they continue to fulfill on the level of service promised.
Discounts can’t be a substitute for true brand development. Your brand must offer something different to consumers, and you have to follow through with that promise. Express Oil didn’t offer anything that was different from any of their competitors, and they even fell short of what promises they did make (speed, quality of service). Instead, they rely solely on discounts, which cripples their potential. The differentiating factor in Dr. Caughey’s dental practice is that it offers a service superior to that of their competitors. As a result, they are able to establish a premium brand that has lasting potential.